What Can Bring Bitcoin Down: Hashing Power Too Centralized?
Bitcoin mining at this scale has opened the doors for hidden centralization – so where can Bitcoin go now?
Bitcoin has been seen as the most stable crypto coin, even after its price slid farther from the nearly $20,000 peak prices. Newcomers are greeted with the message that Bitcoin is immutable, and secured by mathematics. But is it really so? What is the thing that could destroy Bitcoin and erase its value?
Back in 2010, Bitcoin’s network saw an attack that produced 92 billion coins, but the hack was handled quickly. The glitch was fixed at a time when Bitcoin was far from public scrutiny. But in 2018, the profile of Bitcoin has changed, and it has been awarded the moniker of digital gold. The expectations are much higher – and the statistics of an exorbitant hash rate were one of the advantages of Bitcoin over other networks.
The latest flash crash for Bitcoin saw it lose half its value since the start of 2018. And just at this time, talks of 51% attacks and a mining vulnerability are the last thing Bitcoin’s enthusiasts would want. Unfortunately, there are indications that Bitcoin is too centralized, and that a lot of hashing power is becoming concentrated with a few major players.
More and more fingers are pointing at Bitmain – despite the denial of its founder, Jihan Wu. Many believe Bitmain may have hidden hashing power up its sleeve, and to be capable of taking over Bitcoin.
Even holding 51% of the hashrate does not guarantee any profitability. However, there is no telling what can be done with that level of control over Bitcoin – going as far as to destroy the coin. Bitcoin has seen attacks and exchange hacks in the past – but not at the level where a malicious entity could destroy the entire network.
The discussion around the large influence of Bitmain has been heard before – leading to the creation of the ASIC-resistant fork, Bitcoin Gold (BTG). But the return to GPU mining meant that the Bitcoin Gold network had a very low hashrate, and was soon taken over in a recent 51% attack. The same thing happened to ZenCash (ZEN). Hence, changing the mining algorithm of Bitcoin could mean two things: either the most powerful digital asset reverts to low-scale mining, and for a few years is vulnerable to attack, or the new ASIC-resistant chain continues as a contentious hard fork, while a version of Bitcoin keeps getting mined with ASIC.
But changing the PoW for Bitcoin could, hypothetically, come with consensus, with all miners and nodes agreeing to the upgrade. WIthout the consensus, it would be just another Bitcoin fork.
Bitcoin has been called “the honey-badger of money”, and in just one short year, it has survived multiple hard forks, regulatory scrutiny, the multiplying altcoins and projects. But one thing that could destroy the coin is malicious centralization.
Read full story on Cryptovest
Tags: Bitcoin, Centralisation, Bitcoin network